UDP-GlcNAc and UDP-GalNAc comprise the core structures of glycans in glycoproteins and glycolipids. Oligosaccharides containing N-acetyl-hexosamines involved in various biological process, including microbial infection, toxin entry, cancer cell metastasis. They are the key building blocks for human milk oligosaccharides, blood antigens, and other important oligosaccharides. Oligosaccharides with core structures containing these sugars are needed for investigating cell signaling processes and metabolic regulation; these oligosaccharides have intensively been investigated as antimicrobial agents and prospective anticancer vaccines. The limiting factor in the development of these applications is the high production cost and low availability of the UDP-GlcNAc and UDP-GalNAc building blocks. Cost factors include a lack of effective enzymatic systems for making these activated sugars, extensive purification steps, and the cost of nucleoside triphosphates. Here we propose to develop a technology for the large-scale production of two main components of human milk oligosaccharides and other oligosaccharides, UDP-GlcNAc and UDP-GalNAc, from one of most abundant biopolymers in nature, chitin. In Phase I we will select set of enzyme that will enable effective conversion of chitin to GlcNAc-1-phosphate, using zuChem proprietary enzymes will transform to UDP-GlcNAc, UDP- GalNAc, globotetraose and lacto-N-triose II and analyze economic efficiency of this conversion. In Phase II we will optimize reaction condition for large scale production of activated N-acetylhexosamine, expand our library of glycosiltransferases for production of important oligosaccharides: globotetraose, core milk oligosaccharides Lacto-N-tetraose, Lacto-N-neo-tetraose and they derivatives. Finally in Phase III commercialization we will sell UDP- GlcNAc/GalNAc and oligosaccharides.